With Bob Stupak, there's never a dull moment.
The former Stratosphere Corp. chairman and Vegas World owner often left state gaming regulators gasping as they attempted to keep up with and control what he called "creative" and they called "deceptive" marketing programs.
Now, his latest antics have opposing lawyers sputtering about "fraud," "sabotage" and "unethical conduct" and Strip resort operators muttering, "He said what?"
Stupak himself says he's not interested in talking about a letter he sent out earlier this month to more than 19,000 people who bought vacation packages from his old Vegas World hotel-casino and who are now plaintiffs in a class-action lawsuit against him.
In his missive, which may raise the definition of the word "chutzpah" to new heights, Stupak tells the very people suing him that his lawyers will represent them "at no cost to you whatsoever."
And he offers those lucky folks who sign up for his offer "special benefits ... valued at over $500" from Las Vegas Hilton, Caesars Palace, MGM Grand, Excalibur, Bally's, Harrah's and other Las Vegas resorts.
What he's actually offering is a chance to "obtain" a coupon book called "Casino Perks," which offers 2-for-1 ticket deals, matching bets and other promotions from various casinos.
But Stupak won't say how you can "obtain" one, and insists his lawyers will respond to complaints about the letter in court.
"I don't know anything," he says. "You want me to start talking legal stuff? That's what I got lawyers for."
But his lawyers failed to stop U.S. Bankruptcy Court from ruling today that a new letter be sent clarifying the rights of package holders in the class-action lawsuit against Stupak and others.
The court also said it would hear arguments for additional sanctions against Stupak, including possible fines, at a later date.
The latest shenanigans began when Stupak sold pre-paid vacation packages to thousands of people to help finance his plan to build what eventually became the Stratosphere Tower. He promised those who bought the packages that they'd be able to spend a few days up to a few weeks at the resort, some past the year 2000.
In all, Stupak sold more than $25 million of those packages before ceding control of the tower project to Grand Casinos Inc. when additional funding was needed to complete construction.
As part of his agreement with Grand Casinos, Stratosphere and state gaming regulators, Stupak promised that if Stratosphere would honor the pre-paid packages, he'd pay the expenses involved.
To do so, he agreed to put Stratosphere stock or sufficient cash into an escrow account to cover outstanding liabilities. As package holders took vacations, Stupak would sell escrowed Stratosphere stock and reimburse the hotel-casino.
That worked fine for a while. But as Stratosphere stock plummeted from its peak of $14 a share, the time came when there wasn't enough in the account to satisfy potential liabilities.
As a result, Stratosphere said in February it would stop honoring the vacation packages unless Stupak replenished the account with enough cash to cover the debt. He didn't.
Soon thereafter, lawyers for several different package holders filed suits against Stupak, Grand Casinos and Stratosphere, demanding that the obligations be honored. In June, the Bankruptcy Court granted a motion certifying the package holders as a class.
A few weeks later, "Stupak immediately set out to, and did, sabotage the court's ruling," according to plaintiff attorneys Ara Shirinian and Howard Roitman.
"On July 10, he sent a mailing to all class members telling them that he and his lawyers represented them in these (bankruptcy) proceedings ... urged them that 'time was of the essence' and even included a response form authorizing his lawyers to represent them 'at no cost ... whatsoever.'
"Stupak has no viable defense to the vacation package holders claims," Shirinian and Roitman argue.
"He has stepped over the line with this latest stunt ... Neither Stupak nor his lawyers represent the package holders. Indeed, such representation would be patently unethical and never be permitted, and Stupak and his counsel know it.
"The sole purpose of the mailing was to confuse and mislead the package holders. ... This tactic is nothing short of another fraud."
Stupak's letter, entitled "Stratosphere Membership Update," says his attorneys have filed a claim "on my behalf, which includes the remaining benefits owed to you and all other vacation club members. At some future date, you may be entitled to some monetary compensation. However, my financial advisers tell me this is not likely."
It says Stupak wants the recipient's "permission to allow my attorneys to represent you ... at no cost to you whatsoever."
But Stupak's lawyers "cannot possibly represent the package holders, whose claims are not only against Stratosphere and Grand, but also against Stupak himself," Shirinian says.
"Clearly, none of Stupak's lawyers interested in keeping their licenses would ever agree to represent the plaintiff class. Stupak's 'update' says nothing about this obvious conflict and makes no mention of the lawsuit against him.
"Any lawyer who has participated or acquiesced in this scheme has violated the most basic ethical cannons.
"It's obvious Stupak's letter was intentionally designed to lull the class members into falsely believing their interests were protected by Stupak's lawyers."
Stupak's attorney didn't respond to a request for comment.
In the letter to the package holders, Stupak lambasts Grand Casinos and its chairman, his former close friend Lyle Berman, claiming they mismanaged Stratosphere.
"While it's impossible for me to personally offset the Stratosphere's losses," Stupak says, "I have arranged for you to continue vacationing in fabulous Las Vegas ... at a revitalized resort with a 'members only' lounge" -- the Thunderbird Hotel.
"What's more, in consideration of your patience, I am personally going to see that you receive special benefits and savings ... by obtaining a special Casino Perks book ... valued at over $500."
A.P. DuBarry Jr., president of Learnings Experience Inc., which publishes Casino Perks, says the books containing 50 to 60 coupons are provided free to people joining a Casino Perks club and paying a $20 annual fee.
As for Stupak, says DuBarry, "I've never met him in my life."
Spokesmen at several resorts mentioned in the Stupak letter were unaware of the offer and declined to comment until they'd seen copies of it.
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